Divorce can be filled with a lot of negative emotions – stress, anxiety, and sadness. Add disputes around money and property to the mix and you may end up in an irreconcilable mess.
At Balance, we find that some couples may benefit from a Binding Financial Agreement (BFA). While this is the term the Courts use, you are probably more familiar with the terms ‘pre-nups’, ‘post-nups’ or cohabitation agreement. It is often thought these agreements are signed at the beginning of the relationship – but BFA’s can be utilised post separation too! For example, while pre-nups can outline settlement if you separate, BFA’s can be utilised when and after you separate.
So, you may already have some burning questions around BFA’s created post-separation. This post will cover our most frequently asked questions on the topic, and help you decide whether this is an avenue for you and your partner to consider.
“Why should I enter a BFA after separation – can’t the Courts just work it out?”
It can be advantageous, for several reasons, to enter a BFA after separation. We believe that working together can be extremely beneficial in maintaining an amicable relationship post-separation. Entering a BFA can be a great way to give couples the opportunity to take back control of their separation, allowing them to create a mutual and formal agreement around their property settlement.
Excessive litigation and Court fees are draining both emotionally and financially. Entering a BFA somewhat ‘contracts you out’ of the rules of the Family Court. This then prevents the Courts from interfering and allows you and your ex-partner to solve your settlement amicably and swiftly. Importantly, without the Courts, you and your partner can take a more interest-based approach to your separation, as opposed to a position-based approach.
“What does the term ‘BFA’ mean by ‘binding’?”
The term binding refers to the fact that a BFA is a private contract between yourself and your partner. Basically, rather than juggling the complexities of the family courts, you can deal with your entire property settlement outside of the court system (and on your own terms). Therefore, rather than being bound by the courts, you would be bound to your own agreement.
“I am not married but have been living with my partner for some time – can I enter a BFA?”
Any couple can enter into a BFA; whether you are married, de facto, or in a same-sex relationship.
“I found a template for a BFA online and just need a solicitor to sign it – can Balance provide this service?
A BFA is not a document that can simply be created and signed. They are binding, legal, documents that require careful care and attention when being drafted. That is why it is best practice to ask a lawyer to assist with your BFA. After all, you want to ensure you know exactly to what you are agreeing to, as well as any advantages or disadvantages of the agreement you are going to make.
While saving some money and printing off a template may seem appealing, the investment of a well drafted and thorough BFA is worth it.
“Okay, I am interested! How and when do we begin the process?”
BFA’s adhere to strict requirements for them to be ‘binding’. Thus, it is important to engage a lawyer that has experience within the area. To sign the BFA, both parties (yourself and your partner) must seek independent legal advice – that is one lawyer cannot represent both individuals. In this way, each lawyer can give full and frank advice around the advantages and disadvantages of entering a BFA in your position.
Overall, BFA’s after separation can be a fantastic way to take back control and encourage an amicable separation in a time that can often feel stressful and overwhelming. At Balance Family Law, Pepe and Jono are both experienced with BFA’s for couples after separation. If you would like to enquire – please feel free to contact us.
It’s important to get proper legal advice. While BFA’s can be very helpful, they aren’t for everyone and there are risks to manage. Get in touch with our team for more information.
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